News this month from the FLA that motor sales dropped by almost a third from April 2008 to April 2009 is unlikely to have come as a shock to many of you.
Yet despite these findings, I believe now is a good time for market optimism. Although motor sales have fallen since the start of the year, this fall was more modest during May, indicating that things could be on the turn.
The Government’s scrappage scheme will hopefully prove to be the catalyst the industry needs to get sales moving again and initial signs seem positive – with more than 60,000 new cars ordered through it so far.
The scrappage scheme money can provide a boost to customers purchasing a new car, but many will still require finance to help them complete the picture.
The FLA report, mentioned above, reveals that motor finance continues to be the most popular way to buy a car.
More than half of those buying a car during the April ’08 – ’09 period used motor finance to help them make their purchase. PCP deals in particular have proved to be extremely resilient, which could point to a change in consumer habits.
We’ve recently reaffirmed our commitment to the industry by integrating our motor and leisure businesses to create a bigger, stronger Black Horse.
We recognise that alongside initiatives to get the market moving again, access to finance is a vital ingredient to stimulate the market and support sales.
Our lending criteria is much the same as it was a year ago, although understanding our exposure to risk is clearly a priority.
As the clear market leader for point-of-sale motor finance, we take our responsibility to add value to our dealers’ businesses very seriously.
Our Approved Dealership Programme continues to be a strong vehicle to help our dealers sell more POS finance.
We support our dealers who sign up to this programme with high visibility marketing material to use in their showrooms, including signs, literature and branded clothing in bid to help them drive more sales.
We also help them to increase their media profile with marketing and advertising support.
Dealers, who no doubt will be finding ways to make up for the shortfall in sales, will recognise the important potential profit which can be achieved through a greater focus on finance.